Birla Sun Life Mutual Fund has launched a new fund named as Birla Sun Life Capital Protection Oriented Fund - Series 12, a close ended capital protection oriented scheme with the duration of 1094 days from the date of allotment of units. This scheme has been rated CARE AAAmfs (SO) by CARE. The New Fund Offer (NFO) price for the scheme is Rs 10 per unit. The new issue which is open for subscription from 14 August will close on 28 August 2012.
The investment objective of the scheme is to seek to provide capital appreciation linked to equity market with downside protection at the end of tenure.
? Fund expects to achieve down side protection by investing in debt securities maturing on or before the duration of the scheme, subject to the credit risk.
? Fund expects to achieve the market-linked appreciation (upside) by investing in premium of exchange traded options.
? The Fund proposes to restrict its derivative exposure only to the extent of buying of call options. Hence the maximum loss could be equivalent to the premium paid, not any more. Moreover, the premium paid will be equal or lower to the coupon receivable from fixed income securities after providing for fund expenses.
Only growth option will be offered under the scheme.
The scheme would allocate 80% to 100% of assets in debt securities and money market instruments with low to medium risk profile. It would further invest up to 20% of assets in Options Premium with high risk profile, but limited to the premium paid.
Upto 5% of net assets would be invested in A1+/P1+ rated certificate of deposits, upto 5% in A1+/P1+ rated commercial papers, 75% to 80% in non convertible debentures and upto 5% in A1+/P1+ rated any Government Securities/ Treasury Bills/ CBLO / Reverse Repos (on Government Securities/Treasury Bills).
Minimum application amount is Rs 5000 and in multiples of Rs 10 thereafter.
The fund seeks to collect a minimum subscription amount of Rs 20 crore under the scheme during the NFO period.
Entry and exit load charge for the scheme will be nil. No redemption/repurchase of units shall be allowed prior to the maturity of the scheme Investors wishing to exit may do so through stock exchange mode.
Benchmark Index for the scheme will be CRISIL MIP Blended Index.
Prasad Dhonde and Ajay Garg would be the designated Fund Managers of the Scheme.
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